WASHINGTON–The Supreme Court, in a unanimous decision, has ruled that people and businesses subjected to administrative proceedings at the Federal Trade Commission and the Securities and Exchange Commission can seek to enjoin, or block, those proceedings by suing in U.S. District Court and raising constitutional arguments there.
As one analysis observed, “While it addressed a narrow jurisdictional question, it highlighted the court’s increasing skepticism toward administrative tribunals run by federal agencies.”
As CUToday.info regularly reports, the FTC regularly shuts down illicit operations of companies offering various firms of financial services, often at great losses to consumers. But those days may be limited.
‘Hard Days to Come’
William E. Kovacic, a law professor at George Washington University, told the Wall Street Journal, “This foreshadows hard days to come” for the FTC. There is evident discontent in the court about the structure and operations of the FTC.”
Writing for the court, the Wall Street Journal noted Justice Elana Kagan said all the relevant factors “point in the same direction—toward allowing district court review of…claims that the structure, or even existence, of an agency violates the Constitution.”
Plaintiffs in both cases will now move forward in lower courts with arguments that administrative law judges are too difficult for the president or his appointees to remove, violating the separation of powers laid out in the Constitution, an issue the Supreme Court did not address.
Justice Offers Additional Comment
According to Justice Kagan, the FTC isn’t well-suited to deciding constitutional questions about its own power. “The Commission knows a good deal about competition policy, but nothing special about the separation of powers,” Kagan wrote.
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